March 31 (Bloomberg) -- Canada’s gross domestic product expanded for a fourth straight month in January, led by a surge in manufacturing.
Output rose 0.5 percent during the month, Statistics Canada said today in Ottawa, matching the median forecast of 22 economists surveyed by Bloomberg News. Gross domestic product expanded 3.3 percent in the 12 months through January, matching the year-over-year increase in December.
The results “will certainly cause Bank of Canada to at least revise up their growth outlook,” said David Tulk, chief Canada macro strategist for TD Securities, by telephone. “You’re getting stronger net export growth and perhaps a bit softer domestic demand.”
The Bank of Canada forecast in January that output expanded at a 2.5 percent annualized pace between January and March, and that growth will accelerate to 3 percent in the second half of this year. Governor Mark Carney kept his key interest rate at 1 percent on March 1 and the bank said in a statement that policy makers will carefully consider future increases.
The central bank predicts that exports and investment will lead the recovery this year and take over from government and consumer spending as the drivers of growth.
“The areas of the economy targeting domestic demand -- consumer spending and business investment -- are a little bit softer, whereas manufacturing, that’s primarily driven by events in the U.S., is a lot stronger,” Tulk said about today’s report.
Canada’s dollar was little changed at 97.12 cents per U.S. dollar at 9:53 a.m. in Toronto, compared with 97.10 cents yesterday. It earlier touched 96.83 cents.
Today’s report showed that manufacturing expanded 2.8 percent in January, the largest jump since September 2003. The gain followed a 0.8 percent increase in December. Fabricated metal product makers and motor vehicles and parts factories had the largest increases, Statistics Canada said.
Bombardier Inc. will have at least 300 orders for its new CSeries commercial airliner by the time the jet goes into service in 2013, up from 90 now, Gary Scott, the head of Bombardier’s commercial aerospace division, said March 14 at a conference in Scottsdale, Arizona.
The economy is central in the campaign for the election that Conservative Prime Minister Stephen Harper called for May 2 after his government was toppled by opposition parties. Harper has said a “fragile” recovery is at risk because opposition parties rejected the March 22 budget, which ended a two-year stimulus plan while offering C$7.6 billion in new measures over five years.
Canada’s economy grew at a 3.3 percent annualized pace in the period from October to December, the fastest pace among Group of Seven nations, Statistics Canada reported Feb. 28, due in part to the biggest jump in exports since 2004. The expansion had slowed to a pace of 1.8 percent in the third quarter from 5.5 percent in the first quarter of 2010.
Wholesaling rose for a fourth straight month in January, by 0.7 percent, while construction advanced 0.4 percent. Output in the finance, insurance and real estate industry rose 0.5 percent.
Mining and oil and gas extraction declined 0.5 percent, the first drop since September.
In a separate report, Statistics Canada said today non-farm payrolls fell 5,700 in January from December to 14.84 million people. Total hours worked grew 2.9 percent in the month, from a year ago. Average weekly earnings grew 4.2 percent on the year in January, the report said.